Residents across White Lake Township could potentially face higher sewer rates based on an upcoming decision by the township board addressing a decade-old project.

Township Clerk Terry Lilley said a discrepancy in repaying a bond for a sewer line serving half of the township could cause all affected residents to pay more on their monthly sewer rates or make residents of one district pay again for their connection over the span of eight years.

Phase 1 of a sewer project creating a main line serving half of White Lake Township was paid for by a bond from the state, based on 2,500 projected customers. Extensions were added later by special assessment with customers in each special assessment district paying a $1,900 connection fee, which would contribute to the Phase 1 bond.

The discrepancy here, says Lilley, is that the 431 Pontiac Lake parcels paid the $1,900 connection fees but the money was used to subsidize construction costs for the special assessment district rather than contribute to the Phase 1 bond. Presently, the Pontiac Lake special assessment district faces a nearly $689,000 shortfall, while the Phase 1 bond is around $1.2 million short.

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"If they don't pay, who is going to pay?" Lilley asked. "The general users who are left in the project are going to pay, or is the money coming out of the general fund? I see nowhere in the law that the general fund has an obligation to make up that shortfall."

The issue isn't a new one. The project was initiated in 1996 with a nearly $9.4 million bond issuance from the Michigan State Revolving Loan Fund Program at 2.25 percent interest, and another $725,000 bond from Oakland County at a varying rate of 4.8 to 6 percent. Both bonds were to be repaid in the course of 20 years.

The recent Pontiac Lake debacle began in 2003 when money collected from residents was funneled into construction costs rather than toward the previous outstanding bond.

Lilley says township residents have a right to know what's going on in a decision that could leave them shouldering the debts of another district.

"It will affect them in one way or another," he said. "They should have some input as well as what the other people have. I believe their reaction will be 'we're not obligated to pay for you.'"

The township Board of Trustees recently approved a loan for $740,000 to the sewer debt fund to pay off the outstanding bond from Oakland County, a move that township supervisor Greg Baroni said would save the township nearly $21,000 over the life of the project.

Lilley said the township board has several potential options. One is to require Pontiac Lake residents to pay another $1,900 for each parcel over eight years in order to recoup the lost contribution to Phase 1 sewers.

That didn't sit well with Pontiac Lake residents, Baroni said.

"They were upset," he said. "They've been wondering how this has been going on for so long. Now the current board has the challenge to make corrections."

Baroni added the issue stagnated until late last year.

Trustee Rik Kowell is reported as saying it would be a "cold day in hell" before the board voted to reassess Pontiac Lake users who have already paid in full.

Baroni said township officials have met with the township's legal and financial advisers and put in place a program management group to look into the issue.

"We just need to get to the next step as far as bringing this information to the rest of the trustees for their review and come up with a good way of dealing with this issue," he said.

Lilley said that with the contribution from Pontiac Lake, the Phase 1 bond could be repaid in time if the township meets its sewer customer projections.

The White Lake Township Board of Trustees is likely to decide on the matter within the next month, he added.